Collective Rent Dissipation

Abstract

The theory of rent seeking was initiated by Tullock (1967, 1980), followed by Krueger (1974) and Posner (1975) and, more recently, extended in various directions by Allard (1988); Appelbaum and Katz (1986a, b, c); Gradstein and Nitzan (1989); Hillman and Katz (1984, 1987), Hillman and Samet (1987); Hillman and Riley (1989); Katz et al. (1990); Long and Vousden (1987); Ursprung (1990) and Varian (1989). The purpose of this paper is to extend this theory by introducing the possibility of collective-group rent seeking with voluntary individual decisions regarding their extent of participation in the collective rent-seeking efforts.

Keywords

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I am very much indebted to John Hey, Arye L. Hillman, Nava Kahana and two anonymous referees for their useful comments and suggestions. I also wish to express my appreciation to Moshe Glazman for his help in data processing.